- Revenue: Almost PLN22 billion in insurance, an increase of PLN1.9 billion from last year.
- Health Insurance Growth: 11% increase.
- Motor Insurance Growth: More than 15% growth, with almost 9% in motor insurance.
- Profitability: PLN3.7 billion in ROE, almost 17% after three quarters.
- Quarter 3 Results: Almost PLN693 million, with PLN1.215 billion growth in the dominant company.
- Operating Margin: Almost 24%.
- Solvency Ratio: 233%, higher than market average.
- Gross Written Premium: Increased by almost 10% overall, with 14% in nonmotor insurance.
- Healthcare Revenue Growth: Nearly 19%.
- Bank Assets: Almost PLN494 billion.
- Net Insurance Service Expenses: Affected by flooding, PLN275 million in net revenues.
- Combined Ratio: Below 99% for corporate TPL, over 100% for mass insurance.
- Group and Individual Continued Insurance Growth: 3% growth.
- Individual Insurance Growth: 31% increase.
- Assets Managed by Group: 30% growth compared to last year.
- Investment Fund Management Market Share: 9%.
- Gross Insurance Revenue Growth: 8.6% year-on-year.
- Corporate Insurance Growth: Double-digit, almost 13% growth.
- Life Insurance Growth: 7.5% growth, particularly in individual insurance segments.
- Net Result of Dominant Company: PLN626 million in nonbank segment, PLN1.215 billion overall.
- Mass Insurance Revenue Increase: 8.6% growth.
- MOD Growth: 11.1% growth.
- Non-Motor Insurance Growth: 10.2% increase.
- Motor Insurance TPL Growth: 8% in Q3.
- Motor Insurance MOD Growth: 3% in Q3.
- Corporate Insurance Combined Ratio: 88% to 87%.
- Group Insurance Operating Margin: 26%.
- Asset Portfolio Yield Growth: 19% growth adjusted for investment products.
- Adjusted Return on Equity: Nearly 16%.
Release Date: November 21, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Powszechny Zaklad Ubezpieczen SA (PWZYF, Financial) reported a significant revenue increase, reaching almost PLN22 billion in insurance, which is PLN1.9 billion more than the previous year.
- The company achieved a strong growth in health insurance by 11% and motor insurance by more than 15%, indicating robust performance in these segments.
- The profitability of the company remains strong with a return on equity (ROE) of almost 17% after three quarters.
- Powszechny Zaklad Ubezpieczen SA (PWZYF) maintained a very strong capital position with a solvency ratio of 233%, which is higher than the market average.
- The company demonstrated agility and effective crisis management during the recent flood in Poland, handling 46,000 claims swiftly and improving customer satisfaction significantly.
Negative Points
- The profitability in the motor insurance segment remains a challenge, with the company needing to improve operational efficiency and address pricing issues.
- The third quarter results were affected by significant weather-related events, including flooding, which impacted agricultural insurance and resulted in a net cost of PLN275 million.
- There were one-off events affecting the financial results, such as a write-off of a foreign investment amounting to PLN100 million.
- The company faces challenges in the operational model and structure of its assets, particularly concerning the positioning of banks within the group.
- Administrative expenses have increased due to inflation and rising labor costs, impacting the overall cost structure.
Q & A Highlights
Q: Is the PLN275 million related to the flood a legitimate amount, and how has PZU improved its reinsurance program to handle such events in the future?
A: Yes, the PLN275 million is a legitimate amount. PZU has improved its reinsurance program by increasing the first layer of security to enhance resilience against events like flooding. If a similar flood occurs next year, the cost for PZU would be lower due to these improvements.
Q: Are there any long-term unprofitable contracts in the motor insurance segment, and how is PZU addressing profitability in this area?
A: There are no long-term unprofitable contracts in the motor insurance segment. PZU is focusing on optimizing claim handling and related expenses to improve efficiency. The company believes that improvements in these areas will soon be visible.
Q: How will the changes in the reinsurance program affect PZU's results, and when will these changes come into force?
A: The reinsurance program changes, which increased the level of security, came into force midyear. These changes are already in place and would have benefited PZU if the flood had been more severe.
Q: What is PZU's outlook on pricing for TPL in 2025, and will it offset inflation in claim sizes?
A: PZU does not expect pricing changes to be as dynamic as in previous cycles. The market is expected to adjust prices, and PZU aims to achieve a positive result next year without significant leaps in margins. The company is taking measures to close the profitability gap.
Q: Is PZU's dividend policy under review, and will it be part of the strategic plan?
A: Yes, PZU's dividend policy is under review and will be discussed in the strategic plan presentation in December. The company is aware of the importance of dividends and intends to maintain a satisfactory dividend policy.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
